By now, perhaps you have had a look at the August statements from your various custodians. The results are, to say the least, disheartening. Most portfolios will show a significant decline for the month. Looking at the total return from the beginning of the year, we also see a decline, but it is a much more modest one. 

In September already, we have had great volatility and, sadly, I must say that I expect it to continue this way for the foreseeable future. What has been happening is that we have one or a series of horrible days followed by one or more spectacular days. The net result may be zero but, as we are all human and emotions being what they are, we may stress about the bad days and miss the relief of the good ones.

As I write this, after all the sound and fury of the last several months, most broad stock indices are down only slightly for the year and significantly higher than they were a full year ago.

Further, for those of you for whom I have the privilege and responsibility of investment supervision, this volatility is opportunity. Click here for a discussion of the "rebalancing" process.

Now I realize that "down only slightly" is clearly no cause for celebration. But it certainly isn't the cataclysm the media would have us believe. As I always like to point out, corrections and volatility are the price we pay for the superior performance of equities over time. Many economists would argue that the greater the volatility, the greater the ultimate return, as the "risk premium" that stocks must pay goes up. It is my belief that stocks are, in fact, under-priced at the moment. How long it will take for prices to match value is anyone's guess, but the the fundamental truth does not change. As always, The Intelligent Decision is to establish a well thought out plan and stick to it.